Rugby World Cup economic boost could be ‘greater than Olympics’
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The Rugby World Cup, which kicks off at Twickenham in a little more than three months’ time, could be of greater economic benefit to England than the Olympics.
“The World Cup will generate £1bn of direct economic impact, £2.5bn indirect. It is substantial,” said Brett Gosper, the chief executive of World Rugby, which holds the rights to the tournament. “It is probably greater than the Olympics if you take out the capital expenditure of an Olympics.”
The competition will earn a record £650m in revenues, helping to fund the sport’s rapid expansion in the US, Germany and Brazil. “This will be a record World Cup in every criteria. We have hit 2m tickets this week and commercial revenues are higher than they have ever been before,” said Mr Gosper.
According to a UK government report released a year after the 2012 Olympics, the economic impact of the Games in terms of the boost to trade and investment was £9.9bn, though some economists were sceptical that the effect could be measured with any certainty. The London Olympics cost £8.9bn to stage.
Mr Gosper, 55, said his vision was “to grow the game globally”. Markets such as the US — where rugby is now the fastest-growing team sport with 1.4m players, a quarter of them women — are key to bringing in the enlarged television revenues and sponsorships that have brought so much money into football.
Rugby has become an Olympic sport and will be played in Rio next year. In countries such as Russia and China, this has helped to bring government money into the game. “Since we were named into the Olympics in Copenhagen in 2009 we have doubled our participation — people who play any form of rugby two to three times a year — to 7.2m,” said Mr Gosper.
He added that while television viewing figures for rugby’s World Cup were smaller than football’s, sponsors were attracted by the sport’s image.
“We work very hard on us being the sport of character, on the courage of the physical game, on how rugby builds character,” he said. “So if you are a sponsor you might get more eyeballs at a football world cup but we think we hugely compensate with the associative values that brands like to rub up against.”
Rugby also attracted a higher spending fan base, Mr Gosper added, but he denied the tickets were overpriced. “We don’t think the tickets are expensive by comparison with other major global sporting events,” he said. “The demand is huge. There were 600,000 requests for the England versus Australia pool game and not far off that for the final. So from a demand/supply situation, we are not incorrect.”
At present almost two-thirds of World Rugby’s revenues come from television rights and that could grow as the sport becomes more popular in the US. “They like physical sports,” said Mr Gosper. “You don’t have to turn up with helmets and pads. We would say it is a safer version of a physical sport. And it also offers players of various shapes and sizes positions where they can specialise, and every player touches the ball and gets involved.”
World Rugby’s ambitions to spread the gospel in Asia, with the 2019 World Cup to be staged in Japan, have been boosted by the record revenues from this year’s tournament. “It is definitely boldly in a place we have never gone before, in a region we have never gone to before, in a tier-two group we have never gone to before,” said Mr Gosper.
“But England allows us to make a bolder decision.”
Football’s top tier in a different financial league
The focus on commercialising rugby worldwide is starting to have an effect, but executives can only dream of emulating the success of their bigger, brasher cousin in association football, writes Mark Odell.
A new report commissioned by the Premier League found that England’s top tier generated economic benefits worth £6.24bn in the 2013-14 season.
The study, by Ernst & Young, into the wider economic impact of the most watched football league in the world also found that the organisation and its 20 clubs supported 100,000 jobs across the UK, including those in the hospitality sector and gambling.
The annual tax take, generated both directly and indirectly by the Premier League, reached £2.4bn in the same period, which the report said was enough to cover the salaries of 93,000 police constables working in England and Wales.
The report is an attempt by the Premier League to improve its image amid accusations that it is milking fans with its big-money television deals and high ticket prices.
Football authorities are wary that the Fifa scandal could overshadow the sport as a whole. But that did not stop the Premier League from flexing its commercial muscles last week when it announced it would do without a title sponsor after the end of next season, when its deal with Barclays expires.
Instead, it will follow the lead of the only two professional sports leagues that are bigger than it in revenue terms — the US Major League Baseball and National Football League — by presenting a “clean” brand that will allow it to pursue partnership deals with between four and six sponsors.
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